Fiscal Policy in Colombia and Prospective Analysis After the 2008 Financial Crisis
22 Pages Posted: 15 Jan 2012
Date Written: March 25, 2010
The purpose of this study is twofold: First, it provides an empirical characterization of fiscal policy in Colombia over the last decades, by assessing the three most relevant macroeconomic factors: the behavior of fiscal policy over the business cycle; whether it has been coherent with the long-term debt sustainability; and, whether it has been a significant source of macroeconomic volatility. The results are compared internationally. Second, it evaluates the fiscal stance of the Colombian authorities during the 2008 global financial crisis, and examines the adoption of a fiscal rule as an appropriate tool to manage public finances beyond the recovery phase.
Keywords: fiscal policy, business fluctuations, banking crisis, rules vs. discretion
JEL Classification: E62, E32, G21, E69
Suggested Citation: Suggested Citation